GE's 'healthymagination' born from green challenge

Jun 30, 2009 (Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) -- GE | Quote | Chart | News | PowerRating -- The same General Electric Co. executives who goaded the company's engineers to build a "green" locomotive that delivers more power while burning less diesel than its predecessors also are trying to breathe new life into GE's medical technologies division.

"How do you make a big organization innovative?" asks John Dineen, who took over last year as chief executive of GE Healthcare Ltd. "You hand it a big challenge."

Before Dineen took over at GE Healthcare, he ran GE Transportation in Erie, Pa., which redesigned its locomotive engines from scratch and carved new export markets in the process. The engines became part of GE's broader "ecomagination" strategy -- creating technologies as diverse as wind turbines and aircraft engines that align with a new global awareness of energy efficiency.

Five years after GE launched ecomagination, Dineen is leading a similar effort in GE's medical technologies division.

GE is in the throes of the steepest decline in its medical businesses since it began making X-ray tubes in Milwaukee in 1947, Dineen said in an interview in GE's Waukesha offices. Sales have plummeted by double digits, he said without offering specifics. Late last year, GE began cutting jobs in Wisconsin, where it employed nearly 7,000 workers before the downturn began.

GE Healthcare was based in Waukesha until 2004, when it moved its global headquarters to London. It still derives 60% of its $17 billion in annual sales from divisions that are based in metro Milwaukee, such as its huge diagnostic imaging factories.

The new strategy is called "healthymagination" and is meant to align with the international move toward health care that costs less while covering more people and enhancing the quality of care. GE plans to invest $6 billion by 2015 in new medical systems and services that are designed to drive down costs while expanding access and improving quality.

Healthymagination is also timed to the early stages of an effort to overhaul the U.S. health system under the Obama administration.

"Going after a big social challenge is a great business strategy," Dineen said. "That's the most important thing that we learned from ecomagination."

Today, GE's Erie engineworks have moved on to making the world's first hybrid-diesel railroad locomotive. While engine technologies need to meet two variables at once -- lower emissions and higher engine performance -- Dineen notes that health care systems need to meet three: cost, access and quality.

And just as ecomagination operates internationally, the three variables of healthymagination apply almost universally throughout the world, although to different degrees.

"Right now in China and India, it's less about cost and more about access -- how do we get health care to more people. But they still want to do that without exploding the cost," he said.

In the United States, meanwhile, soaring medical costs inflate the cost of living and doing business.

While some see ecomagination or healthymagination as mere marketing campaigns, Dineen calls them "mission statements."

Dineen calls himself one of the two main architects of healthymagination. The other is GE's chief executive, Jeffrey Immelt, who ran GE's medical division from Waukesha until 2001. It was Immelt who launched ecomagination five years ago.

"The beginning of healthymagination was essentially ecomagination, and I lived through that," Dineen said, speaking in Immelt's former office. "I give a lot of credit to Jeff on this. So when he came back and said, 'Should we do something like this in health care?' it was really a no-brainer."

Two weeks ago, Dineen appointed a Milwaukee native, Michael Barber, to coordinate healthymagination as a global enterprise using Waukesha as its base. The effort cuts across a number of GE divisions that go beyond medical systems, including GE's water technologies division, which Dineen says is essential to health in developing nations, and its NBC broadcasting unit, which already has begun to focus on consumer aspects of health.

While GE invariably will count on India and China to develop low-cost technologies -- and it has major technology labs in Bangalore and Shanghai -- engineers in both nations will rely on Wisconsin for components and software, Dineen predicts.

It's too early for GE to point to any signs that its health strategy is getting traction, Dineen said.

But if ecomagination is any indication, it should pay off, he predicts. GE estimates that projects tied to ecomagination generated $17 billion in sales in 2008 and $59 billion since the end of 2004, when GE began it.

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